. >> reporter: a fresh, new legal challenge to obama care began in federal court this week as a group of business owners and individuals from states who opted out of creating a state exchange are fighting an irs regulation which theybelieve is unlawful, financially damaging and exposes them to massive employer and individual obligations. david cleminsic of west virginia is one of the plaintiffs who says he will be affected. >> i'm a sole proprietor in a retail shop in a very small community, population 385, i believe it is now, and there's not a lot of customer base to grow for expansion. there's enough to maintain. i'm happy with where i am, but there's not enough to grow, and it would be an added expense that would make me have to really evaluate whether to continue to do business or not. >> reporter: the plaintiffs argue that the plain text of the law limits subsidies to consumers in states that have created their own exchange, making it illegal for them to be offered through the federal exchange. michael canon is director of health policy studies at the cato institute. >> if the f